What HB 3137 Means for Oregon Real Estate Professionals

Originally published to the Oregon Daily Journal of Commerce on December 2, 2025

Oregon’s real estate industry is preparing for a major regulatory shift as House Bill 3137 will take effect on Jan. 1, 2026. The legislation, signed into law in June 2025, introduces new oversight structures, education requirements, and rules for team operations for real estate professionals. The Oregon Real Estate Agency (OREA) finalized the rulemaking for HB 3137 in October.

The key provisions of the bill are:

Creation of the managing principal broker classification

At the heart of HB 3137 is a new designation: the managing principal broker. Defined as “an individual who is a principal real estate broker and who has registered or assumed responsibility for a business name,” the managing principal broker will bear ultimate responsibility for the professional real estate activity of all associated brokers and any associated branch offices. Any person who holds a principal real estate broker license may be a managing principal broker without further licensure requirements; however, each business name registered with OREA (a registered business name, or RBN) must have only one managing principal broker. In addition to their supervisory duties, managing principal brokers must maintain trust accounts, ensure compliance with state law, and notify OREA of any changes in oversight.

Requirement for supervision and compliance systems

In addition to the duties above, managing principal brokers will be responsible for implementing systems for supervision and compliance through establishing and enforcing written policies and procedures for their RBN. These policies must include systems to review and manage broker activity and active licensure, use of disclosure forms and contracts, proper document handling, management of client trust funds, as well as the management of unlicensed assistants.

Formalization of written supervisory agreements

While a managing principal broker is ultimately responsible for the activities of the business, he or she may delegate supervisory control and responsibility to principal brokers and property managers through written supervisory agreements. These agreements must outline supervisory duties, succession plans, and affirm that the managing principal broker remains accountable for all licensees. If a property manager works with other property managers, they must also execute a written supervisory agreement that similarly defines the specific roles, responsibilities, and control structures. Written supervisory agreements must be updated when another principal broker executes a written supervisory agreement with the managing principal broker, when a property manager transfers to the RBN, or when a property manager or principal broker leaves the RBN and the departure affects the allocation of supervision or management of rental real estate.

Definition and regulation of “real estate teams”

HB 3137 introduces a clear definition and regulatory framework for “real estate teams” in Oregon. The law defines a real estate team as one or more licensees operating under an RBN while using a team name different from the RBN. A managing principal broker must approve a team before formation, and only a managing principal broker, or principal broker under a written supervisory agreement, may manage other team members.

Additionally, real estate teams must provide disclosure to all clients before entering into a buyer representation or listing agreement with a client. This disclosure must include specific information described in the law, including the managing principal broker and the names and roles of all team members and whether they are licensed. OREA will provide a sample disclosure on its website before Jan. 1.

The law also includes a provision that prohibits the use of the terms “realty” or “real estate” in team names. During the public comment period, many individuals objected to this new restriction, citing the potential loss of brand recognition and goodwill for established teams and the considerable financial burden that a rebrand might have on a small business that currently uses the prohibited terms in its name. HB 3137, as passed, still contains the restrictive language, and it will become effective with the other provisions of the law in January. However, OREA is currently collaborating with the sponsors of HB 3137 to introduce a bill to strike the prohibition in the upcoming 2026 legislative session. In the meantime, OREA has stated that it will withhold any determinations on complaints regarding the use of “real estate” or “realty” in a team’s name until the end of the legislative session on March 9, 2026.

Updated continuing education requirements

HB 3137 also aims to reduce risk of malpractice by updating the current continuing education requirement for licensed real estate professionals. Under the new regulation, all brokers, principal brokers, and property managers must complete the state and federal fair housing (SAFFH) course prior to license renewal. While licensees still must complete a law and rule required course (LARRC), the law reduces the course hours from a minimum of three to two and removes the fair housing component from the LARRC. If a licensee completes a 2024-2025 LARRC before the new regulation takes effect on Jan. 1, 2026, but renews their license on or before that date, they will not be required to complete the 2026-2027 LARCC. However, these licensees must still complete the SAFFH course requirement for renewal. Because of the additions to the continuing education requirements, the number of compulsory Advanced Practices course hours in addition to the LARCC and the SAFFH courses will be reduced from 27 to 26 starting on Jan. 1, 2026. Providers offering Advanced Practices courses should submit revised course materials to OREA for approval.

Changes to compensation regulations

Licensees are now able to share portions of their compensation with 501(c)(3) charitable organizations. Oregon law broadly prohibits sharing compensation arising from a real estate transaction with a non-licensed person. HB 3137 relaxes this stringent rule; however, licensees should confirm that an entity holds 501(c)(3) tax-exempt status before making any donation.

HB 3137 represents a significant change to the laws relating to the real estate profession in Oregon. As Jan. 1 approaches, licensees and real estate firms should review their operations, license renewal, and education plans to ensure compliance with new requirements.